Having a well thought-out will or other estate planning instrument in place
can provide peace of mind and financial benefits for any family. This
is particularly true for Native American families.

The complex history of the law governing ownership and distribution of
tribally-owned land and property poses/creates unique risks and concerns
when it comes to the disposition of land and property upon the death of
a family member. Such issues are best addressed with careful and professional
estate planning legal services.

The Current Crisis in Estate Planning for Native American Families

In the past, due to the increasingly complex nature of the laws governing
tribal land, the National Bureau of Indian Affairs (the BIA) provided
estate planning services and maintained wills for tribal members. As a
result, many Native American families chose not to seek independent professional
estate planning services; they simply had no need to be concerned about
effective estate planning practices, or to be aware of the pitfalls present
in federal law governing tribal land.

In April of 2005, however, the BIA announced that it was discontinuing
its estate planning services and would no longer store wills of tribal
members. Many tribal members were left without an effective or reliable
plan for their estates.

Consequently, tribal members, or those with an interest in tribal land,
should take the opportunity to re-consider the benefits that a well-drafted
will or other testamentary instrument can offer Native American families.

Native American also families must take certain precautions to ensure their
estate planning intentions are carried out. Below are a few of the most
important issues that effective estate planning can help to avoid.

A Properly Drafted Will Can Avoid a Finding of Invalid Devises or Heirs

The Indian Reorganization Act of 1934 (IRA) plays a role in determining
how tribal lands can be devised by distinguishing between IRA lands and
non-IRA lands. For tribes adopting the IRA, tribal lands were placed in
trust with the federal government (as IRA lands). For tribes choosing
not to adopt the IRA, tribal lands remained outside the application of
the IRA's provisions (as non-IRA lands).

The non-uniform adoption of the IRA places Native American families in
a tricky situation when drafting a will or other testamentary instrument.
Different rules, each with their own exceptions, apply to IRA and non-IRA lands.

In general, IRA land must be devised (or passed on) to a Native American
in a manner that preserves its trust status. Non-IRA land, on the other
hand, can be devised to whomever the devisee chooses, taking it out of
trust and passing on outright ownership, but to a non-Indian only.

If a will seeking to devise tribal land contains a provision failing to
recognize this important distinction, the devise will be considered invalid
and the federal or tribal governments will determine disposition of that
land. It is unlikely that either government will consider the intent expressed
by the deceased in his or her will.

An effectively drafted instrument, in contrast, can ensure that none of
the provisions included in a will are invalidated due to the terms of
the Indian Reorganization Act. Thus, Native American families should be
sure to consult the provisions of the IRA when drafting their will and,
if necessary, devise their land in a manner that preserves the trust relationship
established therein.

A Will Can Avoid a Third Party Purchase or Forced Sale of Family or Tribal
Land at Probate

In 2004, Congress passed the American Indian Probate Reform Act of 2004
(the AIPRA). The AIPRA has changed the way trusts are distributed among
heirs if a decedent dies without a will. In certain situations where a
decedent dies without a will, the AIPRA allows either (1.) any co-owner
of a federally allocated parcel of land or (2.) any tribal government
to petition to purchase the decedent's interest in that tribal land
before the land is transferred to any heir. As a result, even a valid family
heir to tribal land will be unable to contest the sale of their family's
property to a third party. A valid and appropriately drafted will, however,
can prevent the application of the AIRPA's petition provisions, ensuring
that ownership of land passes as the decedent would have intended.

Advanced Estate Planning Can Avoid the Application of the "Single
Eligible Heir Rule"

Even a Native American family with the foresight to draft a will faces
some unique challenges to ensure that its terms will not be invalided
as a result of federal restrictions pertaining to the devise of Indian land.

One such restriction is the "single eligible heir rule" of the
AIPRA. In part meant to reverse the increasing "fractionalization"
of Native American land resulting from the General Allotment Act of 1887,
the "single eligible heir rule" provides that without a valid
will, any interest in trust land can be inherited only by a "single
eligible heir" - the oldest surviving eligible child, grandchild,
or great grandchild of the deceased. (If there is no surviving heir, the
tribe will take ownership.)

This result can sometimes engender disputes among children and is in contrast
to state law applicable to non-Indians, which divides land equally among
all children of the deceased (after provisions have been made for the
spouse of the deceased).

A well-drafted will can circumvent the application of the "single
eligible heir rule" and allows tribal members to devise their land
to any heir and in any percentage that they choose.

A "Gift Deed" Can Provide Native American Families Some of the
Benefits of a Living Trust

For many families, placing assets in a "living trust," as opposed
to the use of a last will and testament, is a superior estate planning
option. Because many parcels of Indian land are already held in trust
by the federal government, however, Native American families face an additional
hurdle when seeking to gain some of the benefits of a "living trust."
Such families might instead transfer trust property through a "gift
deed" to achieve a similar result.

A "gift deed," if submitted to and approved by the BIA, can be
used to transfer trust property to an heir while avoiding the risks associated
with the use of a last will and testament, as well as taking advantage
of some of the financial benefits of a living trust. These benefits include:
avoiding the probate process, keeping estate planning private, preserving
eligibility for government benefits, and providing a number of potential
tax savings.

Above are only a few of the unique rules applicable to Native American
wills and trusts that Indian families should take into account as they
consider their estate planning options. As these examples illustrate,
Native American families face a number of challenges when seeking to ensure
that their estates are appropriately cared for and distributed upon the
death of a family member.

To ensure that your family has an effective estate plan in place that will
comply with all relevant federal law, consider reading more about estate
planning or contact a McKinley Irvin family lawyer.

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